Yesterday, BESE approved an MFP resolution that now goes to the legislature to be voted upon.

The resolution approved yesterday includes some major changes that align with the Governor’s K-12 reform agenda. The underlying philosophy of these changes is the money to educate a child should follow that child to a broader array of education providers – not just public elementary and secondary schools.

Background on the MFP: The MFP stands for the Minimum Foundation Plan and is the formula that provides the funding for public schools in Louisiana. It includes the local share (local property and sales taxes dedicated to K-12 education) as well as the state share (money paid by the state.) BESE approves an MFP resolution every year, which the legislature can only vote to approve or reject – they cannot amend it.

STUDENT SCHOLARSHIPS (VOUCHERS)

If the legislature votes in favor of this resolution, Student Scholarships will be included in the MFP. The pilot voucher program in New Orleans was funded with state dollars outside of the MFP and had to be annually appropriated by the legislature. By including the vouchers in the MFP, the scholarships will now be funded using both state and local revenues and have the constitutional funding protection provided by the MFP.

Funding: Scholarship students will be included in the public school student count of the local school district and are eligible to receive the state and local share of the MFP. The local school district is required to pay any participating nonpublic school for the scholarship students it serves.

These schools will get the lesser of either their tuition and fees or the per pupil MFP. (Currently the average voucher is less than $5,000 per student; the average per pupil MFP statewide is around $9,000.)

BESE will establish a reduced maximum for participating schools that do not provide services for students with special needs (special education students), which will be less than the full per pupil MFP.

BESE will also be limiting the maximum annual tuition increase that participating schools can charge the program.

Accountability: BESE already has the constitutional authority to approve non-public schools to operate, and this authority allows them to set standards and accountability for the voucher program. The board took its first step towards applying this authority to the voucher program, by including language in the resolution that says in administering the scholarship program, BESE shall establish an accountability mechanism that abides by the law.

Constitutionality Questions Remain

Assuming the legislature approves the resolution, there are still questions surrounding the constitutionality of including the voucher students within the MFP. Louisiana’s constitution states that BESE “shall annually develop and adopt a formula which shall be used to determine the cost of a minimum foundation program of education in all public elementary and secondary schools.” (emphasis added) If inclusion in the MFP is challenged, a court will need to decide on its constitutionality. Until then, it is assumed to be constitutional.

Other Significant Changes

While most people have been focusing on the Scholarship Program, the two changes below will impact many more students, and in time, could redefine the high school experience.

EDUCATIONAL SERVICE PROVIDERS

To further expand choice and educational options, the Resolution now requires school districts to pay for eligible public school students to enroll in:

Courses at universities, community and technical colleges for post-secondary credit (dual enrollment)

Online courses required for graduation

Industry Based Certification Programs

And other providers approved by BESE

Districts must pay either the cost of the course or one-sixth of 90% of the per pupil MFP, whichever is less.

EARLY HIGH SCHOOL GRADUATION SCHOLARSHIP PROGRAM

Beginning in 2013-14, public high school students who graduate a year or a semester early will receive funds that can be used within one year of graduating to pay the cost of tuition, fees or housing at an institution of higher education. Students who graduate a year early would have access to 50% of the per pupil MFP; those graduating a semester early have access to 25% of the per pupil MFP.

Financial Impact on New Orleans Public Schools

There is no way to predict the full impact on schools – especially the high schools – without some idea of the number of students who avail themselves of these options.

It is possible to calculate the impact the changes to the formula will have on the per pupil amount schools will receive. Counter intuitively, schools will receive around $90 more per student with the addition of the Scholarship Program, along with some other changes. The MFP formula is complicated. For those who want to know why funding would go up when thousands more students are added, see the note below

Why the per pupil funding will go up: The MFP has both the local and the state component. The local portion will go down on a per student basis. The locally generated revenues (sales and property taxes) are the same irrespective of the number of students. Due to the changes, the local revenues will now be divided up among several thousand more students. However, the addition of these students will increase the amount the state contributes on a per student basis. Why? The MFP does a local wealth calculation. How much does a penny of sales tax and a mil of property tax generate on a per student basis. When our student count goes up, Orleans becomes less wealthy, so the state increases its share. The increase in the state share is estimated to be $90 more than the decrease in the local share. Go figure!